hello, welcome to today's edition of "worldwide exchange." i'm ross westgate. these are the headlines from around the world. hsbc activity slipping to a nine-month low as new export orders slump. and the biggest economy dropping to a 38-month low. and one of the feds is urging the central bank to take more action footing the economy. a move could be coming sooner

rather than later. plus in earnings' news, margins in the netherlands shrink, while deagoio confirm. okay. welcome to today's program. kelly's now off for the neck seven trailing days, so i'm afraid you just got me. we have the viewers here. the pmi, 47.5. the forecast at reuters was it was to be 77.6, that continues to decline. it's now 45.3. so a little bit stronger. we did see manufacturing in germany stronger. and france is not feared either. so the composite pmi, 46.6. 46.6, which is slightly better

than the cop census of 46.5. the new business index. 44.7. and the mpi consistent with quarterly action of 46.6%. also with us in hong kong, mark conan. mark, nice to see you as well. your number is kind of in line with i guess what the reuters consensus was. let's take a look at the german numbers. manufacturing actually rose a little bit from what we're expecting, and service is much weaker. where are you looking at the real detail here. >> just to talk one thing, the manufacturing sector is still seeing a steeper contraction overall, although that did equal over months. particularly in germany, that services number. in germany, services in july,

showed a slight gain. this month, fell back into a new contraction. >> and also the export orders, 39.6, the first time since 40 cents, 2009. it's clearly suffering. is that subcomponent -- how much of that is intere. ufrlgts and how much of that is outside of the emplgts u.? >> again, germany, most of its trade is coming from the eurozone nations. but as you mentioned, that china pmi, that showed a mark as well. hitting orders and conditions in the german market and german export markets. the global economy is beginning to slow down. we're seeing that a bit in china

and also in trades. >> we see this, i mention this, you say the pmi is consistent with the it 6%. what's your view of the contraction, how much worse it gets or how much longer we stay in a recession area? >> that really is the bigger moment. what really we'll see if the u.s. stimulus has an effect. again, how long this lasts, we're going to see governments mainly involved. that could take months, years more likely a long time. >> mark, i'll bring you in on this, the question is as an t ma whether this is all sort of priced in. is there anything new here that we haven't known for a long time? >> well, i think weaknesses

coming out of europe has been pretty much priced. i think where the market is now is the effect coming out of the big region. particularly china, this week out of japan, concerned exports from china have fallen away. similarly, exports from korea, and now faltering exports to china. so it's all pointing to sort of globally coordinated slowdown which is more worrying. i doubt it's fully factored in at the moment amongst investment managers. >> yeah, because the stock -- we'll come on to that. you mentioned the chinese data, hsbc survey, the lowest in nine months. we have the detail.

bring us through the figures. >> sure, thanks, rouse. hsbc's lowest reading came in at 40.8, hurt by awe new drop and new export numbers. earlier trade numbers out of taiwan and japan but economists have been looking for signs in bottoming and slowing down in the third quarter. this won't happen. analysts say clearly china need to do more to boost the economy, but still in question in near term after the record. so it's likely we'll have to wait until after next week for official hsbc final readings for a better sense of any further action back to you. >> okay, siquan, thanks for that. this helps to further compile it, when you look at the details what concerns you the most?

>> the two things that concerns you most, it's weaker in both the eurozone and still contracting in china. but we're also seeing, again, i can't agree with the other guests any more than what i said, it's the start today coordinated with the economic slowdown, and what we're seeing is the weakness earlier from the european markets. that's the developments. >> mark, what reaction should we get from policymakers in china? because we obviously saw them pumping more money into the banks rather than a triple reserve cut in the last 24 hours. it's clear they're worried about inflation. >> absolutely. you know, despite the head line numbers showing inflation easing a little bit, whether that's cpi or other measures, i think in reality, if you look at weight inflation as a proxy, weight

inflation is still rising at a high level, and not surprising following the global crisis. the affect effect of measures taken, to some extent, i would say to a large extent, policymakers in china are wary of easing too quickly or putting in stimulus. although it seems to be falling from the head line numbers, behind the scenes, i think there's ken that pressure is sell out there. >> there's always seem to be the need, weak reaction means we'll get more stimulus and you can sometimes get a rally on that. so how should we be pricing the policy response from china? and what policy response would it be? >> well, i think we've, so far, seen sort of really just tinkering, fine-tuning, to try and cajole the market.

and try and encourage investors back to the stock market, whether international investors or domestic investors, and so far those measures have really fallen short of significantly changing sentiment. we've seen a couple of rate cuts. one a bit of a surprise on a day in which it's not normally thought of a day in which decisions are made. we've also seen the triple archives as you've mentioned but not substantive. and administrative measures such sass china cuts or cuts for equity investors but none of these measures have really moved the needle. and nothing, as you quite rightly say, generally, when you see weak numbers, it raises expectation of stimulus numbers being applied. you're seeing that a little bit today across the region but interestingly not in the market itself. the chinese market and shanghai market is weaker. i think that's showing the true picture. there's an undercurrent of belief that policymakers are

going to be slow in coming forward with any substantive stimulus. as we go into next year, some of the more structural issues will be start to be addressed and that will come along with more stimulus measures. >> what do you think is going to happen? >> well, to offset values, depends how strong the underlying economies are. as we see the global economy start to slow, that might make people more fearful for a number of markets. >> thanks for joining us. we have compiled those in the eurozone and china. while mark sticks around for the lower, and angela merkel has drawn a line in the sand as far as greece's commitment. she's likely to put on a display of unity later today. they're expected to give the greek prime minister little room for maneuver, if he asks for extra time for athens to meet the terms of its bailout.

the euro chief says greece has one last chance to be granted one last time. and despite warning, he strongly backed greece's continued membership in the euro. >> i'm totally opposed to the exit of greece from the euro area. this will be of no help for greece, and this would entail risks for the whole world. >> they stress that greece is capable of coping even if it receives it later than the due date of october. he has warned that if the handout method came through it all, the company's finances would be in imminent danger of collapse. >> translator: jean claude juncker comes to greece at a

time after learning many things have changed here. i told him in the coming period more things will change. >> okay, so here we are, into the trading day, europe advances out. as you can see the dow jones, a little than 7 to 3. two of the last three sessions, down 1.4%. the dax is down. the dax up 0.4%. and better than expected. that consummate pmi, the german services of course were weak, the services were down. that component, although the manufacturing was better than we thought. so we now wonder how to get most things out of china, and, of course, the fed impact is important.

yields have ridge. in italy, 5.69. yields in the u.s. down, we jump are ten spaces points in yields yesterday. 1.86% is where we stand at the moment. and the dollar as a result has been down across the board in the last 24 hours. sterling trading about 159 a short while ago. 158.90. an interesting day for the aussie dollar. aussie got a boost after the u.s. post. and the china pmi is bringing it back down. the aussie dollar got to 1.0546. and the yen 78.27. moved back up from that. the euro, 1.2557 is where we stand. it's the highest level for the year against the dollar in the last seven months. the dollar index down at a two-month low. the commodity got a boost.

nyemex up. gold is up at 1,662. we continue to keep our eyes on south africa, platinum up again today to 1553. that's where we trade right now, in europe, what's happening with the asian markets today? >> thanks, ross. the asian markets turn positive with more easing from central banks. the shanghai composite closed a quarter%. and gold got a strong boost. in hong kong, the hang seng gained a strong 1.2%. earnings rolled out of major china banks. the nikkei climbed to a three-month high.

and 1.4% after main creditors are planning to extend it. bellwether samsung electronics firmed up 8.1% on bargain hunting. and led by material and industrials, q kwan as it added lower loss. more on qantas later on in the show. back to you. >> we'll catch later. also still to come on today's program, we're going to be talking about qantas. and we'll continue our triple a week. today we head out to munich and determine how germany's retained its gold-plated rating. plus, bankers have kicked off a two-day strike in protest. we'll have the latest from mumbai. and as hollywood prepares

for the statistic of the key movie release system, we'll preview what movies. and if that's not enough, the u.s. housing market. we'll go to phoenix, arizona to speak to an insider who says the market is continuing to move upwards. plus, of course, that qantas data when we come back. [ male announcer ] the perfect photo... [ man ] nice! [ male announcer ] isn't always the one you plan to take. whoa, check it out. hey baby goat... no that's not yours... [ hikers whispering ] ...that's not yours. [ goat bleats ] na, na, na -- no! [ male announcer ] now you can take a photo right from video, so you'll never miss the perfect shot. [ hikers laughing, commenting ] at&t introduces the htc one x. now $99.99. rethink possible.

and the, keep coming. hewlett-packard has reported a $9 billion loss. the biggest in the company history. mostly related to eds. excluding the hp forecast that revenues are down 5%. but the company is cutting its outlook to the lowest range for the most continued weakness in china. the ceo meg bhitman has been urging them to be patient with a major restructuring plan. hp in frankfurt down nearly 6% today. and also the dutch retailer ahold had a better than expected quarter. sending shares lower. the results were boosted by 17% surge in the u.s.

ahold generates more than half of its revenue. warning that inflation is a serious threat facing an otherwise strong u.s. market. >> if you look at the second half, and that's the warning we gave for cautiousness, i would say, what we see is more impact on raising commodity prices. so that's certainly also one of the things we want to. consumer confidence i think in the u.s. hasn't changed certainly the last quarter and we don't see any change in the coming quarters. as i mentioned we always have for our outlook in the u.s., it's continuing to be a very competitive market, as with retailers especially. and that will not change in the second half of this year. >> and also just to bring you petra china, coming at 62.2. the dividend is 1.28%.

it looks like those numbers are slightly off from what we were looking for. and a 30% rise in profits. diageo. that it plans to raise it by 8%. the ceo told msnbc, its company is well positioned. >> we are very well diversified. we're not reliant on any one tick there are market. there, we're not seeing a slowdown, if we do see one, we can offset that opportunity elsewhere. >> and it's been something of a hard landing for the flying cankecan kangaroo. qantas airlines is now posting a loss, boeing dreamliner.

the international in particular is dealing with that issue. >> they're looking at deficiencies and we're one of the leading carriers and that will give us time to cope with it. there is a challenge that the airline is facing. it's a challenge that we have to look out for because we're assuming that this high-fuel price is going to be there for the future. >> joining us, the managing editor of "flight global." mark's still with us in hong kong. thanks for joining us. the international business continuing to report losses. what can they do with that business? >> hi, ross. it's not just fuel which is affecting qantas. i think they're far bigger issues here. one of the biggest problem is the market. they're really operating on a very competitive market. with the costs extremely high.

and all of these issues are affecting qantas so it is really a big challenge for them. and really, they need to do something more than just stay in australia. they need to find partners who can help them get out of australia, get into growth markets like asia, and that is really the key to turning around its international business. if they don't do that, then the prospect of international business are, very frankly, very bleak. >> yeah, and the thing is, if you look at their one world partners, it's not much better for them in that part of the world? >> no. it's affecting everybody. we are in a bit of a tough time here. but qantas, in fact, have peculiar problems. the fact that they're based in australia itself is an issue. they do not have that big of a domestic market. so what they need to do is find new growth markets. they could do that but they could set something up in

malaysia or singapore earlier this year. that problem everybody is facing, but qantas in particular is facing an even bigger one without world partners. >> yeah, cassy, what are they doing that qantas isn't? >> as i said what i said earlier, it's the market. it's based in southeast asia which is growth market. hong kong, a base for china and the northern asian region so they can tap on these markets. they can tap on the long haul market connecting asia to europe and the u.s. and grow on that. they can have demand on the premium and the front end. all of these issues with qantas, qantas doesn't have the natural

advantage of singapore also has taken steps to reduce their costs. find new areas to raise revenues and new roots. cut that on the nonprofitable roots. they seem to be getting a handle on this. it's a challenging time but they seem to know what they're doing. qantas on the other hand is facing more challenges here. >> siva, i agree totally. if you look at some of the challenges they're facing even if they'ble to break into the region, hugely competitive at the time when cargo levels are a lot lower which we have heard had in some of the carriers. and also if you look from a corporate perspective and corporate focused on the bottom line there's not a lot of top-line growth which means some of the business travel is down. i agree with that. what else can qantas do? >> i think the key thing here for qantas is to look at it as a company.

where qantas is successful, jet, the low-cost subsidiary is doing substantially well. what are they doing? they've broken into markets like singapore, vietnam, growth markets where there's potential. they could soon go into hong kong. they seem to be more successful in applying their business model into the growth region and staying advantage of growth there. now, it is tougher for qantas to do something similar, because as a full-service carrier, that puts them directly competition against some of the home carriers. and there will be a lot more resistance to them doing it. but that doesn't mean to stop doing it. actually, qantas should take a sleep out of what jetstar is doing, ironically, and that could be the future. it doesn't necessarily mean give up on the full-service business. there's a potential there. you see them making money in

those markets, but qantas needs to be strategic about where it grows. it needs to get out of australia and go out there and make money. >> siva, thanks. mark sticks around. evans said the fed should do for more to boost u.s. economy. speaking in beijing, shed the july report was better but not good enough. it's the third summer slowdown as the fed has launched in the past two years. those comments come off after the latest that policymakers are thinking about taking action sooner than later. we'll see what james bullard has to say about that. and charles evans, tomorrow at 2:10 a.m. we've seen the reaction on the markets, particularly on the dollar, i suppose the question

is we've had a bit of data improvement since they had that fed meeting. has that been enough for them to stake a hand in it? if they do take action, what would it be? >> well, there's certainly going fob more coming. that's the general feel in the market. although the advocacy of further easing will be questioned academically to any real terms, whether it's fillering through to the economy. i think markets in this region are much more focused on developments in the u.s. than in europe, longer term. although they've been somewhat distracted by the debt crisis in europe. i think as we go through the year-end, they'll be more focused on the forthcoming legislation and sustained recovery in the u.s. and certainly on further stimulus. and that's likely to trigger markets one way or the other in this region. and i think easing is definitely on the cards. >> we'll find out what's more

likely. stick around mark. also on the show, retail dutch ahold could send customers running for the excess. we'll talk about it when we come back.

and here are the headlines from around the globe. the eurozone was close to a

recession. the latest business activity shrinking at an even pace even for germany. a 38-month low. china is a nine-month low according to hp, the export orders continue to slump. and the fed bank takes more action to boost the economy following suggestions in the fed minutes that can could be coming sooner than later. and ahold misses its forecast as measures in the netherlands shrink and confirms its guidance. okay. we're continuing our aaa watch. not all of them have been aaa. but there is one that, of course, stands out. and that is germany, interesting to note that moody's has put it on negative watch. fitch, looking stable.

2012. moody's outlook negative here. they are solely concerned about the impact of the european crisis, and talk about a stable outlook as well. and the crisis, of course, huge compression yields just a month or so ago. remember, in june, we hit a record-low yield of 1.15%. indeed, at the two-year, we have still got auctions with no interest, we saw yesterday, 2014. but as far as bund 1. 51%. and then gilt, 1.67. what about bund versus gilt? that's the spread, suggesting that the mechanism is broken because of the widening out in years and we're a four-point

difference right now. between spanish points as well. where do we go from here? mark konyn is still with us. and let's just kick off with the moody's outlook at the moment. what is the chance, that a eurozone crisis will affect it and costs will have to go up because of burden sharing? >> well, i assume that you already mentioned it, but i'll repeat it just in case you didn't, there are three arguments for moody's that put the rating on a negative outlook those are the increased livelihood of a grooek exit. and the viabilities from the europe rescue and the third one is the vulnerability of german banking sector, with exposure to the peripheral. at least to one of these points,

i.e., the greek exit from the eurozone this, is still quite an open question and the recent comments from european politics suggests that it's not as high as moody's believed when it moved the outlook to negative. >> yeah, i suppose the question is, tear talking tough on greece, aren't they. i suppose the point is whether they feel they can contain any exit enough now? whether the plan is being laid out to be supportive if spain takes a bailout is going to be enough to shield any possible exit? >> right. and i would argue that the fallout of grooek is extremely difficult to forecast. and politicians are advised to paint out those risks in bright colors so there's a lot for greece to fulfill its pledging.

on the other hand, i would assume there's already been quite amount of risk on behalf of the banks for that reason, we would not expect an extreme fallout on the greek exit. >> mare rius, just to come back you, that 1.14%, we're still getting where we're not paying interest. do we go back to record lows and how will germans get no returns? >> well, i guess the whole question of the german rating downgrade can only be discussed in the context of eurozone debt crisis anyway. so you have to come up with these two big scenarios will we have the stabilization of the euro or the breakup of the euro? our assumption is we get a stabilization. but it will take quite a while.

while we're stitt waiting for progress to show up in the stabilization. i would expect we still seeing in tiff or zero yields on short data german paper. and investors being willing to buy into that premium, it's also to some extent a breakup premium. investors are looking for the safety of german bonds in order to have the currency in case germany returns to the deutsche mark. >> mark? >> i'm just worpgding as you look out at potential lowering of sovereign ratings, how that's going to impact the corporate sector? >> well, two points in that respect. we've seen some some peripheral countries that the corporate ratings are not tied one to one

to the sovereign rating. so you might come to a situation where a corporate might even be perceived as more stable credit than a sovereign. and the second point, perhaps, to be looking at the developments in the u.s. with the downgrade of the u.s. came and we saw that it did not have any significance, in fact on the sovereign yield levels, less on corporate yield levels. so that point would be to say, as long as the sovereign still is the relatively safest haven and still perceived, you don't have to necessarily expect an impact on the yield. the sovereign has to pay. and you don't necessarily have to expect pressure on corporate rating. >> marius, good to see you. thanks very much for joining us. now, we also had german data,

confirms .3%, gross count investment in the company is down .9%. patricia, we didn't mention this, germany is sort of the only major country in the world that's actually got better employment numbers since the financial crisis started? >> yes, absolutely. and what we're seeing in terms of employment numbers, in terms of also wage inflation is something that is more or less catching up to what's happening across the board especially when it comes to inflation is really the result of ten years of hard work in germany. why why we're still standing when it comes to the economy data. however, what we're seeing in the gdp in the second quarter, the confirmation is that the gdp, the first half is okay. the pmi indicating, has been

indicating for the past four months, including this month, we're seeing more softening to come. okay? on the positive side, still very strong, 2.5%. also government private expenditure looking okay. however, the new orders part is something that is beginning to falter. i think the forward looking part of the index is what they are watching and more from what we hear in germany that the ecb is taking the pmi data here in germany as one of the reasons they could really change in september. >> we'll see what happens. a lot on the plate. >> good to see you, catch you later, still to come, the blockbuster movie season is wrapping up. we want to know what's the best movie you've seen in months. you want to join the conversation here on "worldwide exchange" get in it up with us,

e-mail worldwide, you can tweet us or directly @rosswest gate. also to come, india's bank is on a two-day nationwide protest for new reforms. what is it they don't like about it. we'll find out when we come back. ♪ ♪ ♪ ♪ [ male announcer ] at&t. the nation's largest 4g network. covering 2,000 more 4g cities and towns than verizon. at&t. rethink possible.

okay. european stocks ahead at the u.s. open. well, they're trying to go a little higher. we have come down, though from the earlier session highs. up 0.2%. and now down 0.6%. and yields have risen. italy hits 5.74%. they are lower in germany and the uk. the dollar index has been down, i think it's down for a couple of months. and right now, euro dollar, 1.2550, trying to hold on to the highs it's had. euro/sterling has risen against the fed which has been dragged

back down by the china pmi numbers. now, around 1 million bank employees in india have begun a two-day strike to protest against reforms they feel have hurt career prospects and lead to job losses. the more from mumbai. what are the reforms that's got everybody so worried? >> well, actually, you know, it's a bit amusing at this point in fact, but what they really is demanding is some amount of refund, employee refunds, with regards to the government of psu at this point. basically, that's what reports are indicating, however, just to put things in perspective. basically, this two-day bank strike which began wednesday was actually expected to cripple bank services in the city. only the national banks have

been affected. the private banks have been open. citi bank, and it was quite minimal in terms of banking strike. now, basically, we do understand, however, that the first day of this bank, the response was very good. 5,000 bank employees gathering at the head office basically in support of the strike. and on thursday, the employees are expected which is basically today to continue the demonstrations in front of their respective offices. however, atms were functioning. actions however have been stopped. and a couple of check clearances also were pretty muff on track. they do end the strike today, but it wasn't that much of an impact because the basic functions were pretty much on. but it definitely did strike a bell with regards to the people who are listening in on the banking strike. back to you. >> thanks very much for that.

the latest from mumbai here. in europe, we post to report a better than expected rising net profit for the second quarter. the results are being posted by 17% surge in revenue for the u.s. where ahold generates half of its sales. in an interview earlier, the ceo dick boer said the american interests remains on price cuts. >> it's all about promotions. what you saw in the second quarter also in the u.s. increasing production in our markets, of course, that helps in gaining share growth in a not-growing market i would say. also, the u.s. has not grown at all i would say in food consumption. so propose motion is, i would say, the most important element for this moment in the u.s. and walmart is doing that, we are doing that. and that's why it will remain a very difficult market environment we are. >> okay. joining us the founder.

thanks for joining us, the u.s. generation, stop and shop, vastly saw margins increasing despite the promotions that he's talking about. i suppose it's not a bad trick. how do you sum up the u.s. business? >> i'd probably say the u.s. business is in a little bit of trouble. this quarter was fine. it came off of a quarter that was bad. i think most of the mainstream are getting squeezed by the likes of walmart, dollar stores, value retailer. at one end, they actually miss the big organic stuff. a lot of us are growing up sort of organic. the likes of whole foods have pretty much cleaned out that market. and therefore, they're just getting squeezed in the middle. >> meanwhile, in europe, they talk about discounting the home market and an unsuccessful campaign around the 2012

football championships as well. what's happening in the home market? >> i think it's very lar to what's happening in america, ross. i think what's happened in most of these, over the last couple of years, it's taken a lot from inflation. on the longside, a lot of greshers have taken on inflation and shoppers are noticing. as a result, we're finding alternative formats. we talk add be the dollar stores in europe. in europe, the same thing, you're seeing that in the uk. i was actually surprised to see that with albert heijin holland. you find the competition dominant way in a dominant market. >> mark, step in. >> with regards to the greater respect in europe, where you are seeing margins decline, the

intention is to focus in on cost cuts. what do you think the outlook is there for further cost-cutting? >> well, i think, again, got to remember, a lot of retailers, i'm talking retailers took a lot of cost action. they actually used the 2009, 2008-2009 crisis as a means to become a lot leaner than they've ever been in terms of using that to look at a supply chain. look at employee base. i think a lot of that work is done. i would say specifically in the u.s., retailers, many more retailers, are far more leaner than we have seen. companies have learned to work on a much more leaner basis. i think in europe, it's a little more difficult because i think some of those decisions were not taken and you have the top line issues that you have over the last couple of years. >> interesting in your notes, you say high commodities, the really big stores, may also be facing a backlash. what do you think is happening? >> i think a couple of things.

i think when you look at the west, people are getting older, they don't like the fact that you got to walk a mile in the store to find something. and in difficult times, temptation, you want to go and don't want to spend too much money. you want to quickly get in the food section and get what you want. the way the hyper markets work, you go all around the store and end up getting temperatuted to something else in the basket. >> who does that benefit? i think the convenience stores. smaller stores even the likes of convenience stores are doing far better than the bigger stores. unfor thely for the likes of walmart, muff more bigger stores. >> just a quick thought about food. we're also seeing the drought in the states, food prices much higher, as well as soybean prices going up. when did is that feed -- how did that feed into the retailers? and what impact is it going to

have? >> i think there's still some ways of seeing that. there will be looks. you talked about corn prices, that's the most direct one. but also hearing evidence about feed going up ultimately coming into be and all other kinds. i think you're a good six months away from that. now you're still seeing an area whereby the cost coming to retailers is actually lower but that will pick up in six months. any impact of that is actually not going to be very good. like i said, you're coming into a stage when it has taken a lot of prices. a lot of package food companies, because that's where a lot of those inflations come from, kellogg's, procter & gamble, if luke at the companies, they've taken a lot of pricing. if you look at their results they're all reporting for what a stable business is, 5: 5%, 6%.

>> okay. thanks for being here. now, mitt romney is going to unveil his energy plan today. the republican candidate is calling for u.s. energy independence by 2015. he would take over drilling on federal lands and open up more offshore drilling starting on the coast of virginia and north of south carolina. and his plan would start the approval process to build new nuclear power plants. over in japan, the prime minister noda reported to hint for an early november election. a weak government with a weak coalition could pose more policy confusion the world's largest. he's japan's sixth prime minister in six years. and potro china, earnings in

second quarter fell 21% to $3.6 billion. china's gas output rose 3.8% in the first half of the year. the second quarter profit was up 5% to $5.84 billion. a slight nonperforming loans helped the bank meet expectations. let's get a final thought from mark konyn. mark, we were talking earlier, we've had this melt-up in global during the course of the summer on the hopes, i guess, on policymakers, on the hopes there will be some plan that brings down spanish borrowing. now the fed will act hopes. and maybe the hopes that we'll get positive response from china. i guess the question is, is everything going to happen? is the risk on the downside or the upside here? >> well, i think the real risk at the moment in terms of this

rally that we've seen through the current quarter that it loses momentum. it's been predicated on fairly thin volumes if you compare volumes. i would say, the downside is somewhat limited. we've seen quality stocks do pretty well. certainly in asia. high-yielding stocks do pretty well. so there's some protection there. and i would say in ters terms o discounting, looking forward, to tell you what's been factored in, some of the cyclicals looking better, as we are expecting to see somewhat of a cyclical recovery and that would include retail, construction-related companies in the region. some companies in china. and some of the others that going to be more sensitive to government spending, like india or china, where ultimately we do

see the government taking a bigger role in the economy to put a line underneath any potential slowdown. >> and yet, according to your note here, you're underweight china. >> certainly, the outlook immediately is quite uncertain. i investors globally have still not come to terms with the fact that growth rates have fallen and elected to stay lower than they've been in recent times for lock. and the policy response is not going to be as forthcoming as we've seen in the past so there's an adjust period before investors get comfortable with the slower growth rates in china. as i said earlier, policy is constrained because although head line inflation numbers are coming down, it's clear the weight inflation is still at very elevated levels. and that's going to hold back any significant stimulus, certainly, in the foreseeable future. so the sort of stimulus or structural change that we're looking at, as i said earlier, one the new government takes up

the reins trying to address some of the structures in the new economy. so it's much more forward-looking than any immediate pickup would come in the stimulus package being unveiled. >> mark, thank you for coming today. it's good to have you on board. just to remind you what's on the agenda in asia, china construction bank earnings sinopec, because, data, taiwan and singapore post their second quarter gdp. still to come, more qe could be on the cards when they continue.

this is "worldwide exchange" here with headlines from around the world today. the recession the latest in business activity shrinking at a steep pace to germany to drop to a 38-month low. china is also down to a nine-month low according to the hsbc pmi. new export numbers slumping. and the fed bank to take more action, coming up in the fed minutes that a move could be coming sooner lan thart. and the pc giant a continued

witness in both europe and china. and if you just joined us state sides, a very good morning, welcome to global trading day. that's it. you got me on my own. kelly's away for seven trailing days. but she will be in the states streetside, you'll be able to catch her there. we are currently, the forecasts firmer on u.s. markets. dow 13,180. s&p 500, around 500. european stocks, mix data out of europe this morning. now after losses down two the last three sessions, the losses, the ftse up a quarter%.

and dax up a tenth. and the ibex up 0.7%. and export records down. and compost pm i for the year or so, 49.6, 46.5 in july. we have seen also yields starting to crawl back up as a result in spain and italy. the spanish yields, 6.2. yesterday, 6.4. in italy, up to 5.7. the yields yesterday when we saw the ten-year rally by ten bases points, 1.7%. now even lower, back down to 1.68%. the dollar, well, that's been weak with the index down to a two-month low. 1.5890 sterling dollar at the moment. we got up to 1.59 since may

15th. aussie dollar, initially, we saw the aussie dollar rallying along with lots of commodities, and the china dollar, at 1.5586. and the yen 1.5884. again, it's called back some of those losses. the euro dollar, the gains, 1.2549. we hit a seven-week high with 1.2560 thereabouts. that's where we trade here in europe. let's remind you what's happened in the asian trading session. sixuan has all the deals. >> hi, ross. the pmi readings were overshadowed by more hopes by banks. up a quarter percent, gold miners got a strong boost after raised expectations. the hang seng off the three-month low gain, a strong

are 1.2% left by a 1.7% in china telecom. but slumped more than 4%. the nikkei climbed to a three-month high's exporters came back to lost ground. and main creditors planning to expend $5.4 billion in loans. bellwether sensex electronics up. and the slump in the underlying profit is still slightly better than market expectations. lastly, lower down by a quarter percent right now. back to you. >> sixuan, thanks very much. the latest data of the eurozone makes grim reading. the markets pmi index, 49.6,

that reading is still well below the 50 market that separates the contraction for expanding. germany going business activity down to a 38-month low. this comes as the german chancellor angela merkel tried to draw a line in the sand with regard to her position on greek bailout extensions. he meets in berlin later today. and not effects to give the greek prime minister atonis little move. this is euro chief jean claude. jo jean-claude gives one last chance. when they meet in athens next month. despite the warnings there, he has backed greece's continued membership in the euro.

>> i'm totally opposed to the exit of greece from the euro area. this will be of no help for greece. and this would entail major risks for the whole euro world. >> and the comments from sammeris has expressed that greece is capable. although he's warned that the company's finances are in imminent danger of collapse. >> translator: jean-claude juncker comes to greece at a crucial time after many things have changed here. i'm told that in the coming period even more things will change. >> head of fixed income research for the euro jen, nice to see. let's concentrate on europe this morning. the data here now pointing to

the contraction of sort of minus .4%, minus .5%. we've got it looking to shore up spanish yields and the economy gets worse. so what are they going to do at the next meeting? are they going to deliver the things that the markets have hoped for? >> well, i certainly think, if they don't deliver it would be a major, major negative so i think they have to, i think they have to provide clarification that they are willing to buy short-term bonds to size. and i think they will do so. i think it's unlikely that we get something very explicit in terms of yield time or things like that. but feel the commitment will be sufficient to support the short end. we have an interesting divergence where funding markets potential have stabilized to some degree, but the economy is still deteriorating. so there's a divergence behind the underlying economy and how

the market is playing out right now. >> the fact that the core, in this case, saying germany still getting worse, the new export orders below 40, since 2009. how did that play into policymakers' response? some say if the german economy gets worse, that will allow this do do more. does it play like that or not? >> well, i certainly think the fact that the weakness has broaden to really involve the core companies, too, it means obviously the ecb is going to be more flexible. we could potentially have additional rate cuts on the cards. and the wohl intervention that stems from the ecb is supported by the fact that there is no inflation risk. in that respect, it makes it easy. i think the risk that comes out of this core base weakening is that it could set in motion a more broad-based exit of capital out of the eurozone. altogether, whereas in the

earlier phase of the crisis there's more flow from the periphery to the core. so that's the real risk, comes from the fact that we have this broadening weakness. >> yeah, of course, financial condition are very tight indeed. so does that provide them with more coverage? >> absolutely. i think the commoning from it in the last couple of months have been the potentially the money market and essentially currency-risk premiuming imbedded in the yield curves in the periphery, they really warrant that the ecb steps in and intervenes in a fashion that's going to bring back the normal monetary mechanism. and i think that's what the cover it's tried to give himself and that's the cover he's managed to use to get more consensus, including from politics behind the stand he's

indicating. >> we're going to talk about the fed. clearly, back to the low sort of 12040. does it have much more to go or not? >> yeah, i think we're in sort of a dazing phase. the euro is looking less one way than a while. i wouldn't be surprised if it squeezed from 1.26, 1.27. i think the upside from there is quite limited. we have to keep in mind risk premium coming down to some degree, risk premium better than the euro and others, the reason that we inject liquidity or have the prospect of more liquidity being injected and that's a real negative. it's almost a stalemate from those two factors. >> let's just remind you, jenns, on the u.s. agenda.

the market flash u.s. pmi data. 10:00 a.m., july new home sales, they're expected to rise nearly 3%. and charles evans said the reserve should do more to boost the u.s. economy. speaking in beijing, he think july was better, but not good enough but he thinks current actions already warrant action because it's the third slowdown in the u.s. those comments coming off the latest minutes that they're thinking about taking action sooner than later. jens, what's your own reaction to the minutes? since those minutes, the data has gotten a little better on a number of measures. is it good enough to stop them acting? or do we now expect more action, and if so, what is it going to be? >> well, i have to say, these are the most interesting minutes i've read for years. i think there was some real concrete concept in there that

was not imbedded in my expectations. and the real news was that essentially the fed is now saying unless the data includes substantially, they're going to go ahead and implement some additional stimulus fairly soon. so that really means that we need to get a pickup in the data that is material in order to avoid additional easing. so to say the data has picked up to some degree, i think it would be wrong to say that the data's picked up materially. in fact, the data's been quite mixed. so unlessby see additional improvement in short order, i think it's now becoming quite likely again and soon. >> what about the other options? they're taking the extending the interest rates? are they still talking about whether they should lower the deposit rates? there's a lot of concern whether they do that.

>> yeah, i think on the extension, on the rate, i think that's almost a given that will be done. the minutes said that they're essentially waiting for their own forecasted profits to extend it. so i think that's a given now. on the deposit rate, that seems to be much further down the list in terms of things they want to change. so i don't think that will take place at this meeting. >> of course, of course, the dollar index hits a two-month low. is there more dollar rest to come as we head to the jackson hole and fed meeting? >> i'm afraid i've lost the connection. >> jens, we'll refix that connection and ask you that question again. we'll see what jimmy bullard had to say on all of this. he's co-hosting u.s. "squawk box" at 7:00. don't miss out on that. and charles evans is speaking. on the asia "squawk box," that's from hong kong on friday.

what's going on in africa right now, south africa, these are live pictures of what's taking place in africa. the memorial was for an accident at the mine in sfrifr ka. we're going out to sfrifr ka for the latest we're continuing to raise that. more on that exchange when we come back.

and these are the headlines today from around the world. the eurozone is moving close to recession. the latest pmi shows business activity continues to shrink in august. a fed in the central bank takes more action to shrink the u.s. economy. and the hp cuts continued outlook in europe and china. stay tuned to the show. we have the latest on the unrest that's reportedly spreading across the regions. get great values on some of our newest models.

this is the pit of perfection.

okay. we have seen posters of fed minutes of course, a rise in commodity markets just a little earlier. the dollars come back since the chinese pmi. the australian miner problem is over. one day after bafring out of scompangs worth $40 million. and later saying commodity

prices have peaked and australia will see billion-dollar investments. mark, he's still with us. what happens now to the currency? >> i think there's slowlying global growth that is important that feeds into commodity prices potential. but what i think makes currencies tricky is that the fact that these currencies are also benefitting from the search from safe assets in the double bonds. so australia and canada both have aaa-rated bond markets. the central market are keen to get those assets on board. that's countering the effects of the commodities and that's keeping this at a relative strong level, despite the risk to commodities. >> and that plays out in the eurozone as well. people looking for money in

places other than the euro. the swedish crown has benefited a lot. now, the rich bank indicates we might cut rates. so all of these safe haven plays on the threat? >> yeah, i think in the swas of the swedish, krona, we've had an extraordinary move in the last months. that is something that the bank will have to incorporate, inflation is going to feed into inflation process in a very direct fashion and therefore feed into the policies. i think at these levels, even though we believe in the underlying story, we think the potential for gain is probably quite limited from here. >> so you talk about competing interests. on the one hand, of course, you want the safe haven. the commodity currencies should weaken if we get weaker growth out of china. but of course, we saw the dollar strengthen on the fed.

and then you got the fed, of course, that might do more qe. so what happens to the dollar. the dollar index down to two-month low overnight. where does it go now with the new fed expectations? >> yes, i think certainly it was a surprise what happened in the minutes, and therefore from the short-term tradie inine ining p tiff, is that the dollar will trade, and we have to look at now the jackson hole speech will be super important in whether bernanke preannounces a program. if he does that, i think that will give the dollar another leg to the downside. i think that's very possible. >> okay. so we'll see what happens. what right now then, with the cross-cards, what is the favored pair do you want to trade? >> we've actually been quite

focused on yen process. process like sterling yen and as yen versus the global markets, we think global has potential to be reduced in epic space, obviously getting very elevated in the second quarter. and i think as we come out and see those risk premiums reduced that means the yen will weaken against currencies like sterling and emerging market occur raepsraep currencies. that's our key focus. if we have the fed in terms of stimulus that should benefit that process. >> jens, stick around. we're going to the memorial services taking place in south africa. one week that left miners dead. disconcerting feelings spreading. these are from marikana. joining us from johannesburg, a

reporter out of sfrix ka. south africa. we've heard angela talking about it. how much is this spreading across the south africa mining community. >> owe what has happened, we have had almost 500 mine workers who are now from rb plex, they have started to mine and are making wage demands. a little difficult than what is happening here at the moment. this has come about with regards to the announcement that r.b. would be making changes. the platinum industry has been making changes. looking at the rising costs and declining costs for platinum has

caused the platinum industry to start cutting down. this is what's happening in the mining industry. we are seeing that happen and at r.b. plat. >> okay. thanks indeed for that. that's the latest from johannesburg, south africa. there was a delay with that, but that happens. moving on, the summer movie season is coming to an end. with the olympics in july, how good a season has it been. here is jane. thanks for joining us. clearly, the film is a standout, but what's the rest of season been like? >> it's still been quite good. obviously, the olympics have had an impact also good weather this summer which also keeps people away and americans had the unfortunate incident in colorado

which scared off cinemagoers. people are finding different ways to watch films. streaming them. watching them on dvd. they watch them on ipad. so the cinema. it's marginally going down. >> we've seen the history has been the more technology, the more ways you can see movies is actually -- the impact has been encouraging people to go back to the cinema houses to watch them? >> yeah, i think the studio heads knew exactly how to do it, they would be doing that to make people go straight back to the cinema. but obviously, there's always massive winners like "the avengers." >> and "the dark knight" that's a big one, too. why has that caught so much? >> "the avengers" have had

numbers working towards it, they've had four, the appetite is there, and people waiting in one place. they've absolutely loved it when they've seen it. >> the real problem for studios, of course, it's a hard business. but you don't quite know when you're going to get a big hit, i suppose. and then you're going to get a bit of a dud. it makes it incredibly difficult as a business, i suppose, to forecast. and they try to forecast a lot of sequels. we're going to keep seeing franchise films that is the one that guarantees the most stability? >> yeah, it seems to be that's what people expect. they want to see a franchise or an adaptation of a tv show or what they're getting. but there are things that trend like "ted" or "bridesmaids" last summer. >> what should we be looking

for? >> sly stallone with his. >> yes. jane, thanks for joining us. still to come on "worldwide exchange," we'll have the latest on tropical storm isaac that's heading for florida. we'll take the post of the u.s. housing industry as well. and a reminder where the trading is and we are indicating at the moment for a poster start in u.s. stocks.

this is "worldwide exchange." i'm ross westgate. here are your headlines. the euro is moving close to a recession. showing business activity shrinking. germany seeing its rating drop to 38-month low. china drops to a nine-month low, according to the pmi data as new export orders slump. and the fed to take action to boost the economy. that follows suggestions from the fed minutes. but the move won't be sooner than later. and hp has cut its outlook to pc giant highlights to continued weakness in both europe and china. okay. if you just joined us stateside, a very good morning to you, our

markets look like they might get a bump up this morning. s&p 500 around five points. the nasdaq around eight points fair value. and around what, 40 points, fair value, for the dow. follows data out of chien that which we'll get into, the pmi a little weaker. gold down 300. pmis in you're continue to suggestion we're going to get a quarterly contraction in europe for the next quarter. around minus .4%, minus .5%. exports in germany below 40 for the first time since 2009. how does that translate into european markets? well, they've been told in a number of ways, the fed which is posted the china pmis down as well. right now, the ftse down 0.4%.

and the dax down, and we have seen yields on the spanish continuing to rise as well. what about that china pmi data? down to nine-month lows. what does that mean. jens, good to see you. i suppose that signals we're going to get more stimulus. but what kind of stimulus, we know, authorities even though they have inflation, what were 53 seen of it? >> what we've seen, more of that is potentially in store. and i think on the inflation side, we've seen headline numbers come down quite materially so that provides some room of time for them to downplay that risk and focus on the growth dynamic again. >> yeah. it was interesting yesterday, they're pumping money directly into the banking system. they weren't sort of cutting

reserve requirements. should we be looki ing for fisc purging measures than cuts from the hsbc? >> yeah, i think the trend we've seen in terms of announcements in the last months, they go the regional side to do the stimulus on that route. i think that could be a pattern that you'll see over the next couple of months as well. i think certainly from an inflation perspective, the upside risks have diminished materially. obviously, if you look at the growth picture, and the growth picture specifically, that suggests that that downward path will be something that will be with us for the next four quarters. >> just moving out of china, going to e.n. currencies at the moment. obviously, they're be looking at this global synchronized slowdown. >> i think one big decision that

investors have to make globally is whether you focus on the global growth dynamic, which is fairly weak, or whether you focus on the fact that some risks in europe have potentially didn't reduced. and intent on the process being reduced further over the next couple of weeks. we have some important events coming up, obviously the ecb meeting on september 6th. the constitutional ruling in germany on september 12th. if though go well, it could be the funding in yu ing iing in y reduced further. and that could overwhelm what is going on in the growth side. i think it's important not only to look at economic data but also to look at these funding risks and how prevalent they are. if it diminishes, i think that is speaking for itself. >> good to see you again.

jens. so that's what jens thinks, but what about other guests we've had on cnbc this morning. here's a recap of their trade ideas. >> in september, at least, it's the short term, if you've made money in equities over the rally we've seen recently, then this would be a good time to take profit, in advance of the fed, the ecb, the fed, euro group meeting. the dutch elections. the troy group report on greece. we have a lot going on in september. and the money in the bank. >> it will, i think, lead to higher prices for the day. 15911. up to 1.5975. now for us here, the activity or the flow, it has been fairly quiet in the currencies. in fact, we're seeing more

selling with the euro and the dollar. our money flow continues to be gold. still like credits. it's specially high-yielding in the u.s. because we think the financial position of companies is very solid. and what is in terms of trade is much higher than what will actually happen. >> that's some of the thoughts of the guests already today. tropical storm isaac is threatening to rain on the republicans parade. if it continues along the path for florida, it will be just that time for the national convention. we'll track the latest developments from the weather channel when we come back.

okay. plan of reaction for the commodity markets to the fed minutes and the chinese data. up nearly a dollar. as high as 98.29. spot gold has been the highest since may 1st. currently traying at 1662. and platinum is down to supply concerns in south africa.

and ainge lnglo talking about t yesterday. 1550. what we're seeing the spread between platinum and gold now substantially in the last couple of weeks down to 28 we're now down to 111 between the spreads in those two. orange juice also jumping to a six-month high. this after warning that tropical storm isaac is strengthening into a hurricane and could possibly hit florida by monday. orange juice the biggest market since wilma hit back in 2005. is the storm going to hit, joining us on the phone from atlanta, eric fisher, from weather channel, eric, what's the likely path right now? >> well, things are coming into better agreements, usually, when you look five, six days out there's a long possibility where storms track. we've seen a change.

a lot further west it's come east. so right now, it looks like the most likely track takes it south to hispaniola, haiti, the dominican republic. crosses cuba, into the keys and passes gulf of mexico just west of the florida coastline which will bring a lot of heavy winds and strong rains to florida and potential the gulf coast. >> but it may miss, you say, miss the mainland of florida which would be the concerns with regard to the orange crops? >> well, there's a give and take with that. the circulation may pass off to lands but isaac is a huge storm. just across the entire circulation is about a thousand miles which is about the distance from atlanta to boston. so when you talk about the impacts, a lat of the time, it's not the wind that creates a major issue but it's the flooding rain. and that's going to be our biggest concern moving forward. >> and most likely, this storm builds up pace and gets bigger?

>> we should see at least the next 12 to 24 hours. right now, barely a tropical storm, it's just hanging on. but as it gets his act together, moves farther west, probably becomes a category 1 hurricane as it moves up the keys may weaken again and come back up to hurricane strength. don't think it's going to be a match hurricane in terms of winds over 115 mill miles per hour. but florida has been very wet over the past month is. so it's already soggy. additional tropical rain could cause an issue? >> what is the time line here? how long before it hits the main land? >> we're be looking at probably early by monday morning, the center of circulation up towards the florida keys but the rain should arrive in sunday by southern florida. by tuesday, just west of the tampa. at that point, we've got the gop convention going on there. we should see a serious impact there for the republican party. >> good talking to you this morning. official update from the weather

channel we have news out of opel, the gm european unit. there's been a dramatic drop in the european car market. this just coming out, a dramatic drop in the european car market. and just a reminder today if you just joined in, these are the headlines around the world. the u.s. moves closer to recession, pmi shows business activity shrinking again in august. the fed said central banks more action to boost the u.s. economy. and hp reccos rival dell after the continued weakness in both europe and china. >

okay. getting some big corporate

earnings out today over the last 24 hours. hewlett-packard has reported a $9 billion loss. the biggest in the company's 73-year history mostly related to the acquisition of cds, excluding actions. company has cut its outlook to the low end of its previous range because of the continued slump in the pc market and weakness in u.s. and china. the ceo meg whitman has been urging to be patient. with the stock trending down yesterday nearly 6%. the dutch retailer ahold has reported better than expected 24% net rise in profits in the second quarter. but earnings just shy sending stocks lower. the result 17% surge if revenue for the u.s. ahold generates more than half its revenue. but in an interview with the ceo

warned that they're at a serious threat facing an otherwise strong u.s. market. >> if you look at the second half and that's the warning we gave for cautiousness, what we see the impact on raising commodity prices. so that's certainly also one of the things we want, too. consumer confidence, i think, in the u.s. doesn't change, certainly the last quarter and we don't see any change in the coming quarters. and as i mentioned, we always had for our outlook in the u.s., it's continuing anyway, very competitive market with retailers. especially with retailers. and that will not change in the second half of this year. >> and diogeo has reported a13-% rise. the world's biggest spirits maker said it was on track to meet targets and that it plans to raise its final by 8%. the ceo told tolder.

>> we are very well diversified. we are not reliant on one particular market, worry not seeing a slowdown, but if we do see one, we can improve set that with opportunities elsewhere. >> ahead of the european markets, well, we are up. just under half of 1% and a third. e-dax is down 2%. getting up towards 6.5% as well. on the agenda today in the united states, we got weekly jobs claims. kelly's favorite numbers. 8:30. the market 1,000, from 65,000. at 9:00 a.m., we get the august market flash, pmi. and july new home sales which are expected to rise 3%.

hormel foods, the maker of the famous mystery meet spam, big lots and we'll hear from salesforce.com. i connell think of monty python when i think of spam. u.s. futures, of course, up this morning. trading, s&p 500, and nasdaq trading up. and the dow currently trading at 38 points. the u.s. existing home sales are up 2% in july to an animal rate of 4.7. the pickup was reflected in three of the country's four regions and of course all types of homes, condos leading the way by 14%. so what are we to make of what seems to be a bottoming and a turning-around in the national housing market. joining us it tanya demarco.

what's the time there, tanya, about 2:50 or something? >> i think it's almost 3:00 a.m. >> we appreciate you getting up this early. so we've seen a lot of stats here, home prices up, existing home sales up. existing inventory down. so the national picture suggests we're looking a lot better. how much better? and how much can you actually talk about a national housing market anyway? >> you can't talk about a national housing market. it's impossible. it's just like when everybody was talking about the bub bursting. we have microbursts going on right now in the united states. in order to make money, you have to understand these markets. when you look at the market as a whole, from the second quarter of 2011 to the sec quarter of 2012, we're seeing huge improvement, we're seeing 7% gains. and that's statically, out of

110 markets are up from the 143 markets surveyed. so we're seeing a lot of data. like you said, the existing inventory is down 24% and the distress properties are down 43%. so these are positive signs for the housing market. but when you really look at where you're making money in the united states, you have to look at those markets that went way up, came way down, bounced on the bottom and we're seeing slight gains right now. and that's phoenix, miami. those two markets have huge job growth and that's really what's pushing the housing market. more so in phoenix than even miami. >> yes, jobs are the key, right? it seems to be what you're saying? >> that's absolutely it. so we can have low housing prices and great rental returns but who's going to live there if they don't have a job. arizona is one of those places,

fortunately, that has insight, honeywell, google, motorola, all of these companies are here, really, we don't have inclement weather so we're not worried about that hurricanes that going to hit florida. we really are seeing a lot of tech come to the valley. we can integrate a building twice and you have an environment for technology so it really a place that it's starting to boom. phoenix, slated for two cities, the projections are that over 2 million more people will live here by the year 2030. so when you're talking housing you have to look at all of those things an understand your markets, and this is somewhere you want to be as an investor for the long haul. not for a quick flip. that game is over. but for a buy and hold creating solid crash return, phoenix and arizona markets are really one of them that you want to take a look at very seriously. >> i'd like to be there from january to april to play golf. that sounds good for me.

>> you don't want to be here in june? >> well, with the warmup, not something that i could put up with. let's talk about the stress properties. the numbers are coming down. how meaningful is that? >> we need to be very careful when we talk about distressed properties. the bottom line is there's still 3 million homes that are under water. now, how those homes get brought out to the market will be the key. they, because of the bailout, are in a positive situation right now. they're back making money and they can hold on to that inventory and trickle it out. one of the things i read the other day but was really interesting to me was homes have to go to the courthouse steps, to the trustee sales here in arizona. and what the banks are doing, they're overprizing those homes at the trustee sale to get them back into the inventory as reos so they can put them on the open market and make the most gains

that they. so our banks are not stupid, they understand what's going on, and they see the gains in this market as well. >> tanya, we're going to let you go. thanks so much for getting up early. we appreciate it. a big shoutout to arizona as well. i think all the folks there will appreciate that. we appreciate it. tanya, thank you. >> no, i don't think so. have a great day. >> thank you, you too. i don't know whether you're going to bed now. it's like do you come out of the nightclub or do you go to work? >> i haven't decided yet. >> right. i nearly got myself in a lot of trouble. still to come, "squawk box" is coming up next, the team will be joined by the st. louis fed president jimmy bullard. you don't want to miss that. for "way too earlorldwide excha

bu good-bye. i hope you have a good day. continuing to lend and investe in communities across the country. whether it's supporting a delaware nonprofit that's providing training and employment opportunities, investing in the revitalization of a neighborhood in the bronx, or providing the financing to help a beloved san diego bakery expand, what's important to communities across the country is important to us. and we're proud to work with all of those who are creating a stronger future for everyone.

good morning, everyone. hewlett-packard posted the worst loss of the company's history. ceo meg whitman urges investors be patient with the turnaround plan. the fed sends a message. and orange juice futures spike on concerns that isaac could be a hurricane as it inches closer to florida. joe and andrea are off today. steve and gary, guys, welcome, it is thursday, august 23rd, 2012, and "squawk box" begins right now. good